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Business News

Lagos regulations on ride-hailing companies, fair or outrageous

Although there has been no official announcement just yet, it seems as if the conversations with authorities and affected companies are leaning towards a N10million naira license fee and N25million fee for those with more than 1000 drivers.

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4 key points in the new Lagos 2020 Land Use Charge, Lagos offers tech founders N250 million seed fund, cuts stringent access , Governor Sanwo-olu launches 14 ferries to tackle gridlock, says Okada ban irreversible, ride-hailing

Since the phase out of motorcycles and tricycles from the roads of Lagos state, the government has shifted its attention to ride-hailing companies, Uber and Bolt. There have been series of reported cases of clashes between Uber/Bolt drivers and the authorities.

Reportedly, the Vehicle Inspection Officers (VIO) have been requesting certifications, hackney permits, and strangely, operating licenses as well, which are supposed to be obtained by 3rd party operators themselves, from these drivers as requirements to operate in the state.

Apparently, sometime ago, Uber had stopped making hackney permits, which turn private vehicles to commercial ones, a requirement, and now that it is required by the state it has become a source of inconvenience for all stake holders.

Although there has been no official announcement just yet, it seems as if the conversations with authorities and affected companies are leaning towards a N10million naira license fee and N25million fee for those with more than 1000 drivers.
Subsequently, the ride-hailing companies would pay annual renewal fees of N5million, and N10million if they have over 1000 drivers.

READ MORE: Uber, Bolt riders lament over high charges, as Okada ban persists in Lagos

For transport companies that own their own cars with employed drivers, the regulation may mandate them to pay N5million. However, if their drivers exceed 50, they would be required to pay N10 million.

Operators, who own their vehicles and employ drivers will also be required to pay the fee of N5million and N10million if there are more than 50 drivers. The state government also expects to earn 10% on the fee for each trip.

However, these regulations are not finalized and may still be amended; like Ayoade Ibrahim, the President of the National Union of Professional E-hailing Driver- Partners said, conversations with the state government are still being had as regards that.

Ayoade also said that to argue their case, the government would need to reconsider its stance, as such outrageous fees would not only affect these businesses but also stifle the services provided, which in turn would affect citizens that use the platforms.

Nevertheless, tech companies would need to be flexible enough to respond to changing rules and policies, not only at the national level but locally too, mostly because states and municipalities have their own sets of rules.

Regulations and regulatory bodies are undeniably important, to have a process and order for the way things are done. However, such outlandish expectations from businesses or startups could be deterrents to innovative technology solutions which may lead to more conducive living and that otherwise foster economic growth.

READ ALSO: Just-in: Fresh suspected case of coronavirus in Enugu

Here’s why:
1. Policies can become market catalysts: the government can implement a policy that may change social behavior in business by underwriting the development of new technology that would bring necessary change, like in this case, potentially imposing on the transport sector more taxes than are necessary would likely make investors lose interest.
2. A stable political system can make businesses: friendly decisions promote local businesses and attract foreign investors. Unstable systems, on the other hand, present challenges that jeopardize the ability of government to maintain law and order.
3. The government gets money to spend from taxation; increased spending requires an increase in taxes or borrowing. Any tax increase will discourage investment, especially among entrepreneurs, who take the risks of starting and managing businesses which will eat into the limited pool of savings, leaving less money for private investment which in turn leads to elimination of jobs. This is true in reality when you see the number of drivers and riders who have been and may be out of jobs as a result of the new transport policies in Lagos state.
4. The requirements for permits or licenses have effects on business – tech businesses might spend a lot of money and time to comply with regulations that ultimately prove to be ineffective and unnecessary. Fair and effective regulations should promote business growth.

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4 Comments

4 Comments

  1. Ademola Akinsola

    March 16, 2020 at 4:05 pm

    The LASG is so greedy & insensitive for wanting to get 10% on each ride after billing so much for licenses and permits.

    Opay gets 5% on each ride it’s passenger takes despite providing the bike & the system. That’s why it’s easy for it to overtake existing bike-hailing companies.

    Investors & operators will likely be frustrated out of the business.

    Nigeria doesn’t need more of this firebrigade approach to long term economic issues.

    • Anonymous

      April 4, 2020 at 8:30 am

      There nothing greedy and insensitive about what government is asking for about the 10% out of the 25/20/15% of the total amount the App companies collect from the Drivers.

      If you tag the government “greedy and insensitive” what would you tag the App companies.?

      They claim to provide Jobs for the Youth, but what happened to you after some years on the job, after you have invested all your money time and energy to promote them and you are suddenly witchunted away from the platform, what happened to your investment.?

      The government is right to ask the citizens to pay tax, App companies make profit, why should government be left unpaid.?

      Since they failed to pay the government and even claim to the government that they are not the transportation company, the government has to go hunt for the drivers who are the Transporters.

      And here comes the Unity of all drivers.!!!

  2. Anonymous

    March 17, 2020 at 9:03 am

    The Lagos state authority should come out boldly and state their instances on this issue, they should come out of their silence

  3. Anonymous

    April 4, 2020 at 8:13 am

    Its a good thing that government is coming to regulate this Slave Monsters call Uberbolt, what baffles most is the self acclaim guy parading himself as president when of course he does not even know anything about the job, he is a fleet manager, not an active Driver,(these doesn’t mean he doesn’t have driver account). The 10% request by the government would make the App companies stop unjustifiable deactivation of Drivers, and in return makes them stops low fare mentality and unreasonable give away to the riders all at the expense of driver-partners and the Idiots Ayoade is fighting the government for these.

    The government is justified by the 10% they ask for, they needed driver-partners to be part of tax payers in the state, which is supposed to be done by the App companies, but they failed, or are we saying that government shouldn’t be paid tax by the drivers.?

    Government is fighting for equality in the system, every reasonable Drivers is solidly behind the government on these.

    No to Modern Enslavement by Uber and Bolt. All over the world.

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